Solicitor Louise Low, in our Dispute Resolution team explains some of the issues that can be encountered with the executors of an estate.
Even the most straightforward estate will take some time to administer following a death. The executors will need to obtain full details of the deceased’s assets and liabilities, to complete the necessary tax forms and then to apply for a grant of probate. There is at present something of a backlog for getting approval from HMRC of the tax return and so applications which were dealt with in weeks are now taking many months.
Once they have received the grant, the executors will collect in and, where appropriate, sell the assets, then pay the estate’s debts and liabilities. Only when these have been settled, and all of the tax liabilities (including any Capital Gains Tax) established, are they in a position to make any distributions to the named beneficiaries.
The administration of a straightforward estate will typically be between nine and eighteen months from the grant of probate, although if there is a property to be sold this can extend this timeframe. Complex estates with multiple properties and/or foreign investments can of course take much longer to administer. Where there is a dispute over the will or the estate, distributions are very unlikely to take place before those issues have been fully resolved.
It is generally advisable for the executors to place a notice in the London Gazette, giving creditors two months from the date of publication to notify them of any claim they may have against the estate. Executors who advertise in this way are protected from personal liability for the debts should a valid claim arise later.
It may also be prudent for the executors to make no distributions for at least ten months from when the grant is received. This is because there is a six-month time limit for claims under the Inheritance (Provision for Family and Dependents) Act 1975 to be issued at Court, which runs from the date of the grant of probate. There is then a further four-month window for the Court papers to be served, making a total of ten months before the executors can be reasonably satisfied that a claim is not being brought.
You may also have heard of “the executor’s year” which arises in two ways. Firstly, a personal representative is not bound to distribute the estate before one year after the death. Secondly gifts of money (legacies rather than a share of the residue) normally attract interest after one year from the date of death.
Specific legacies need to be dealt with before payments are made to the residuary beneficiaries.
Sometimes problems arise because the executor is not aware of their obligations and the distribution process. In these circumstances it is often advisable for the executor to instruct an independent solicitor. Whilst this will be a cost to the estate, it is almost certainly far cheaper than seeking to have the executor removed, or having mistakes resolved after the fact.
Where the administration of the estate is delayed for a valid reason, the executors may be willing to consider making interim distributions to the residuary beneficiaries on account of their entitlement. Executors should adopt a cautious approach and ensure that they retain sufficient funds to deal with any unexpected issues and any costs.
If, after considering these factors, there is unreasonable delay, you should write to the executor, pointing out his/her obligation to keep all beneficiaries updated on the progress of managing the estate. You can also demand that the executor provide an “account” of the estate which should outline how much you are due to receive. If they refuse, there is a relatively straightforward process for obtaining a court order that the executor produces an inventory and an account of their dealings with the estate.
If the executor is not complying with their obligations, you may be able to have them removed and replaced, usually by an independent solicitor. This is not a straightforward process and involves a costly application to the court. It is important to ensure that you obtain proper legal advice before considering that step as in particular an initial “protocol” letter will need to be sent warning the executor before any court application is made. If this step is not undertaken, costs may be ordered against you, so advice from an appropriate expert should be sought.
For further information or legal advice, please contact law@blandy.co.uk or call 0118 951 6800.
This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.
